[sudden] China Evergrande may sell some of its assets! Including but not limited to Evergrande

On the evening of August 10, China Evergrande announced that it was in contact with several potential independent third-party investors to discuss the sale of some of the company's assets. including, but not limited to, the sale of some interests in China Evergrande New Energy Automobile Group Co., Ltd., a listed subsidiary of the company, and Evergrande property Group Co., Ltd.

The announcement said that as of the date of the announcement, no specific plan or formal agreement had been determined or concluded. If the final agreement of the plan is implemented, the company will make a further announcement.

On the same day, Evergrande issued a similar announcement.

On the evening of Aug. 9, Evergrande issued a profit warning for the first half of 2021, predicting a net loss of about 4.8 billion yuan in the first half, double the net loss of 2.45 billion yuan in the same period last year.

The loss in the first half of this year was mainly due to the expansion of new energy vehicle business, the announcement said. The business is currently in the investment stage, the purchase of fixed assets and equipment, research and development and other related costs increase and interest expenditure is larger. The company will officially release its first-half results at the end of August.

Since entering the new energy vehicle market in 2019, Evergrande has completed the layout of the upstream and downstream industrial chains of automobiles, such as technology, qualifications, batteries, sales, talents, etc., through large-scale "buying". It has obtained the core technology in the fields of vehicle manufacturing, chassis structure, powertrain, hub motor, power battery and so on.

At its 2020 results conference in March this year, Evergrande management revealed that the company has invested a total of 47.4 billion yuan in the new energy vehicle industry and 24.9 billion yuan in vehicle research and design, power battery, self-driving and intelligent network connection. According to the plan, Evergrande will develop 14 new energy models, which will be put into mass production from the end of 2021 to the beginning of 2022, and 1 million vehicles will be produced and sold in 2025.

But at the same time, according to its financial report, Evergrande posted a net loss of 7.665 billion yuan in 2020, an increase of 54.93 percent from 4.947 billion yuan in the same period in 2019. With a loss of 4.8 billion yuan in the first half of this year, Evergrande has lost more than 17.4 billion yuan since 2019.

To this end, Evergrande has raised a total of 40.6 billion yuan since September last year and has granted employees nearly 130 million shares.

Or affected by this, Evergrande's share price has fallen gradually since it reached 70.85 yuan per share on the opening day of the Shanghai auto show on April 19 this year, and hit 10.34 yuan per share in intraday trading on July 27, a drop of more than 85 percent.

At the same time, recently, the overdue commercial ticket of Evergrande once again aroused public concern about the operation of Evergrande. Some prominent real estate analysts commented on Evergrande's plans for such a sale that it might help reassure creditors and send a signal that corporate liquidity can improve in the future.